With the implications of the ACA becoming more and more real, agents have begun to fight in earnest for a more defined role in the changing health insurance landscape. Conversations persist between industry representatives and Congress, and consumer advocacy groups are now also chiming in on whether these proposed broker protections will save money or continue to make health care unaffordable for many consumers.
Agents warn that alienating them from state health exchanges – required under the ACA to be established in all states by 2014 – will make the exchanges difficult to get off the ground and will leave consumers without adequate guidance as they navigate new insurance options. In addition, they assert that removing agents from the purchase process (and thereby eliminating commission fees) won't really save that much money.
"I think we make it a more efficient system," said Dave Ver Woert, a broker in Cedar Rapids, IA, in an interview with Kaiser Health News. "We add point zero zero something percent to the costs, so they're attacking a small, small piece of what the bigger problem is. … Health insurance is expensive because health care is expensive."
Consumer lobbyists, on the other hand, say that the legislation proposed by the insurance commissioners will serve merely to pad the industry's pockets, while leaving consumers out in the cold. Worse, they speculate that, under a simplified system, agents may not be needed.
Timothy Jost, a professor at the Washington and Lee University School of Law and an official consumer representative to the NAIC, said most people won't need advice from agents once the exchanges are in place. "Frankly I don't think that there's going to be quite as much to do as there is now," he said.
Support varies by state
States have varied responses to the agent's plight. Iowa has taken the most aggressive pro-agent stance with a proposed bill that would require all consumers to work with a broker when purchasing health insurance in the new exchanges. If the legislation goes through, it will also guarantee that brokers receive a commission of at least 5 percent for their services. Minnesota has also proposed protective legislation, which would require that anyone selling, negotiating, or soliciting insurance for a health plan be licensed by the state.
In contrast, both the District of Columbia and Maryland have proposed bills that would ban agent involvement in the decision-making process.
As the battle over reform rages on, the good news for agents is that the industry as a whole has a fair amount of political pull, both at the federal level and especially among state insurance commissioners.
